EMC Zips Lips on Tape

EMC Corp. (NYSE: EMC) may be planning a tape product rollout for early summer, in a move that could reverse the company's official resistance to tape and significantly change the tape library market.

For months, there have been rumors about EMC planning a foray into tape, either by acquiring a company or OEMing technology but speculation has fizzled as regularly as it surfaced. Recently, though, the level of industry chatter has reached a new level, and at least two sources expect something to happen within the next few weeks.

"I think it's for real this time," says one financial analyst, who asked not to be quoted. "They may have a first offering in the May timeframe, followed by others after that." The analyst says there's been a lot of secrecy surrounding the potential rollout.

Word from this analyst and at least two others is that Advanced Digital Information Corp. (Nasdaq: ADIC) could be the first tape vendor to provide technology or an OEM'd product to EMC for rollout as part of its Clariion midrange line, though ADIC may be followed by other vendors, too.

EMC already has cooperative support agreements with ADIC and other tape vendors, including Silicon Storage Technology Inc. (SST) (Nasdaq: SSTI), and way back in 2001 it set up a resale partnership with Quantum Corp. (NYSE: DSS), whereby that vendor supplies tape libraries that are bundled with EMC's backup products.Up to now, though, EMC has held firm about not offering a tape product of its own, though it recently announced the bundling of tape emulation software from FalconStor Software Inc. (Nasdaq: FALC) as part of its new Clariion Disk Library (see EMC and HP Spin Disk).

One observer thinks it's high time EMC got wise to tape. "If they're going to provide a total end-to-end ILM solution, they have to have tape. Not having tape is not an option," says Kaushik Roy of Susquehanna Financial Group.

EMC provided no official response to questions about this at press time, but CEO Joe Tucci fanned the flames by playing coy last week during the company's earnings call (see EMC Earnings Up). When asked if he was considering a reseller partnership with a tape library vendor, he said: "I've been reading those same rumors," he said. "Tell you what, why don't we give you an update on that at Analyst Day?"

EMC's day for briefing financial analysts is slated for June 10, 2004, in New York City.

If EMC gets into tape, sources think the move could challenge Storage Technology Corp. (StorageTek) (NYSE: STK), which continues to enjoy a dominant position in tape, though it competes vigorously against EMC in disk as well.— Mary Jander, Site Editor, and Dave Raffo, Senior Editor, Byte and Switch